Elon Musk isn’t the one tech billionaire with energy over the federal companies that regulate his companies. Since Donald Trump took workplace, greater than three dozen workers, allies, and traders of Musk, Peter Thiel, Marc Andreessen, and Palmer Luckey have taken roles at federal companies, serving to direct billions in contracts to their firms.
Corporations owned, based, or invested in by Musk, Thiel, Andreessen, and Luckey have collected greater than a dozen federal contracts totaling about $6 billion since Trump’s inauguration in January, in keeping with a Wall Road Journal evaluation. And so they’re actively pursuing billions extra.
These appointments, that are in departments that oversee, regulate, and award enterprise to the 4 males’s firms, increase a variety of crimson flags. They may violate conflict-of-interest legal guidelines or authorities ethics rules, each of which prohibit federal workers from utilizing public workplace for personal achieve.
And whereas it’s commonplace to put in trusted allies in authorities roles, Musk’s community has moved in at an unprecedented price and scale. TechCrunch has beforehand reported on the entire individuals in Musk’s universe who’ve joined him at DOGE, the place he has shuttered federal companies and slashed workforces in departments that regulate his companies. Not less than 19 others with Silicon Valley connections, be they founders or traders, have additionally joined DOGE.
“The second Trump administration is definitely the primary in recent times to not impose any form of further ethics safeguards on high-level appointees,” Daniel Weiner, director of the Brennan Heart’s Elections and Authorities Program, instructed TechCrunch. He famous that Trump fired the director of the Workplace of Authorities Ethics and 17 inspectors normal who served as watchdogs for fraud and abuse, instantly after taking workplace.
“It actually does doubtlessly improve the chance that you’ve individuals engaged on issues that do impression, at the very least not directly, their backside strains,” Weiner mentioned. “However it is a long-term subject in our authorities that’s not distinctive to this administration.”
Innovation versus accountability
Peter Thiel speaks in the course of the Bitcoin 2022 Convention.Picture Credit:Marco Bello / Getty Pictures
Some might argue that it is sensible for workers and associates of Musk, Thiel, Andreessen, and Luckey to affix authorities companies. Their insiders are gifted people who’re behind the cutting-edge know-how the federal government genuinely wants, they usually perceive the best way to innovate rapidly and compete globally.
Extra critical questions come up when favoritism threatens to undermine competitors, when coverage is created or destroyed to guard market dominance, or when rules that might serve the general public good are waylaid to advertise enterprise pursuits.
For example, the Shopper Monetary Safety Bureau not too long ago retreated from pursuing guidelines that might prohibit information brokers, regardless of rising privateness issues — a shift that stands to learn firms concerned in AI, surveillance, and information analytics. One other instance is DOGE’s firing of staffers on the Nationwide Freeway Site visitors Security Administration who examine autonomous automobile security, together with a number of probes into Tesla.
“One of many defining structural challenges the federal government of the US has proper now’s that we now have a system through which the very wealthiest pursuits have a lot energy to form our elections after which flip round and form authorities coverage,” Weiner mentioned.
One other Silicon Valley appointee, Mike Kratsios — a former Thiel worker — is now main know-how coverage for the U.S. authorities. In an April speech, he spoke about throwing away unhealthy rules that “overwhelm our innovators,” notably those that are innovating in AI.
“Many individuals in Silicon Valley are inclined to suppose that no matter labored in Silicon Valley can also be going to work for administering the US authorities,” Weiner mentioned. “And as we’re seeing now, the hazard is lots of people are going to get damage due to the assumptions they make.”
“The truth that you had a profitable startup after 5 others failed doesn’t essentially imply you know the way to run the Social Safety Administration,” he continued.
A community inside and a payoff exterior
Marc Andreessen, co-founder and normal accomplice of Andreessen Horowitz.Picture Credit:David Paul Morris/Bloomberg / Getty Pictures
The entire companies between Musk, Thiel, Andreessen, and Luckey are associated. Musk’s SpaceX was backed by Thiel’s Founders Fund and Andreessen’s a16z (which additionally invested in X and xAI). Each of these VCs additionally backed Anduril, Luckey’s protection startup.
The overlapping community of founders, funders, and insiders extends into a number of federal companies. And in lots of instances, these companies are steering billions in federal contracts again to these firms.
The Journal discovered that throughout Washington, individuals from Musk’s community, together with Tesla, X, and SpaceX, are in additional than a dozen companies, from the chief workplace of the president and Workplace of Personnel Administration all the way in which all the way down to the Division of Transportation and the Division of Power.
SpaceX workers are additionally in companies that might present the corporate new enterprise. For instance, the Journal experiences that SpaceX senior engineer Theodore Malaska acquired an ethics waiver in February that lets him take a short lived job on the Federal Aviation Administration whereas nonetheless working on the rocket firm. The FAA hasn’t given any contracts to SpaceX but, however Malaska mentioned on X the company has used Starlink to improve a weather-observing system in Alaska.
SpaceX can also be the primary business supplier that transports crew and cargo for NASA. Regardless of nationwide safety issues — like the corporate’s secret backdoor for Chinese language funding and Musk’s reported drug use — SpaceX in April received $5.9 billion of a $13.7 billion multi-year contract from the U.S. Area Pressure to launch Pentagon missions. The DOD, which is at the moment a Starlink buyer, additionally plans to purchase SpaceX’s Starshield satellitesa militarized model of the web satellites.
Staff at Thiel-backed corporations have discovered themselves in roles within the State Division, the Workplace of Administration and Funds, Well being and Human Providers, and Social Safety, per The Wall Road Journal. Thiel’s Palantir has already been awarded almost $376 million since 2020 from the Division of Well being and Human Providers. In 2024, the corporate was additionally awarded at the very least $1.2 billion in Division of Protection contracts in 2024 and is within the operating for one other $100 million deal.
Anduril, Palantir, and SpaceX not too long ago submitted a multibillion-dollar proposal for Trump’s “Golden Dome” missile-defense program, which might additionally add to Anduril’s present contracts with the U.S. Military. Lately, Anduril and Microsoft took over a 2021 contract price as much as $22 billion to develop AR headsets, per the Journal.
An Anduril government, Michael Obadal, has been nominated to a prime position on the Division of Protection. In his ethics disclosure, he said that he would retain his Anduril inventory if appointed.
TechCrunch has reached out to Anduril, Andreessen Horowitz (a16z), Palantir, and SpaceX for remark.
“This form of focus of personal wealth and political energy is in the end very dangerous for our financial system,” Weiner mentioned. “As a result of as a substitute of the federal government making selections which can be meant to foster competitors, foster financial progress, you run the true threat that authorities selections are going to as a substitute be structured round defending explicit firms and explicit industries from full financial competitors.”
